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Jan 25 - 04:55 AM

EUR/USD - Buyer EUR/USD Downside Options In Big Amounts

By Richard Pace  —  Jan 25 - 02:50 AM
  • Dealers report a EUR/USD 3-month expiry 1.0200 EUR put/USD call buyer

  • Traded Tuesday on as much as EUR 1-billion - its implied vol was 9.8

  • Premium would have been around $16-pips or 0.14% of EUR

  • Demand lifted EUR put premiums on 1-3-month risk reversals from 1-year lows

  • However, traders shouldn't panic about EUR/USD suddenly reversing course

  • Option maybe short covering a portfolio or taking advantage of cheaper vol

  • This option would benefit from a mild EUR/USD setback/implied vol gains


For more click on FXBUZ


Source:
Refinitiv IFR Research/Market Commentary

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